Vietnam at a Pivotal Moment: A Brief Overview

Vietnam is currently a focal point for investors seeking opportunities outside of China, thanks to its strategic location in Southeast Asia and various free trade agreements. A robust economic landscape characterized by a youthful workforce and burgeoning tech scene has set the stage for potential growth.

As global companies diversify their supply chains, Vietnam has positioned itself as a tempting “alternative to China.” With agreements like the EU-Vietnam Free Trade Agreement and the Regional Comprehensive Economic Partnership, the country is increasingly integrated into the global economy. These treaties not only reduce tariffs but also foster collaboration in areas such as technology and sustainable development.

However, while the prospects seem bright, Vietnam is grappling with significant challenges. Its infrastructure, particularly in logistics, is often described as dilapidated. Poor transport networks affect the efficiency with which goods can be moved, adding to already high logistics costs. Companies face hurdles not just in shipping but also in navigating the bureaucratic processes that can delay essential operations.

Space is another premium in Vietnam’s urban areas. As cities like Ho Chi Minh City and Hanoi continue to grow, the demand for real estate, both commercial and residential, skyrockets. This can hinder the growth of businesses looking to establish operations. The competition for land drives costs up, creating an additional barrier for new entrants in the market.

Politically and socially, Vietnam is also at a crossroads. The government has been making strides to improve the business environment and simplify regulations. Yet, the underlying challenge remains the need for transparency and a legal framework that supports foreign investment. Efforts to foster innovation are underway, but businesses often find the regulatory landscape murky.

In terms of skilled labor, Vietnam boasts a young and enthusiastic workforce, but there is a skills gap in more advanced sectors. As industries evolve, the need for training and education to meet the demands of modern business continues to grow. Initiatives in vocational training and partnerships with educational institutions are essential as Vietnam navigates this transition.

Last updated: 28. September 2025